Legislators consider tax bonus for new downtown businesses

A bill designed to revitalize Iowa’s downtown retail districts was discussed Thursday at the statehouse. The bill would give back the five cent state sales tax businesses collect for any new retail locating in a city’s downtown. Representative Pam Jochum, a Dubuque Democrat, said a city is only as vibrant as its downtown.

Jochum says they are trying to find a meaningful way to help cities entice or bring more retail business to the downtown area. Jochum says just sprucing up the downtown isn’t enough. She says they have a whole block in her community that has been restored to the way they looked in the late 1800’s, but she says they need to do more to get businesses to locate there.

But critics said tax breaks for retail are problematic, because of unfair competition. Democratic Representative Tom Schueller runs a small business in Maquoketa and says," I’m struggling to pay bills every month and suddenly somebody else can come in that could be my competitor, and you’re going to give him five percent more than I make on every dollar just because he’s gonna come to my town?"

Dave Roderer, with the Iowa Chamber Alliance, wondered how you can distinguish between retail you want to attract, and the Starbucks and Subways which are going to come anyway. Roederer says you probably don’t need to give incentives for those type of businesses to move in, the challenge is to get other types of businesses to move in.

The bill’s sponsors agreed the legislation needs more work. The Chamber Alliance says property tax relief is the real answer to revitalizing downtowns.